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In a recession, when demand is falling, businesses are likely to see their stocks of unsold products rising. Before long, they run out of storage space and if they are in the service sector, their employees will have very little to do. In this situation, the options confronting managers are all unattractive and are all likely to bring falling profits:
● They can try cutting prices and hope to sell more, but their competitors may be doing the same thing.
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